Encrypted mempools aim to eliminate “toxic MEV” practices such as frontrunning by concealing transactions until confirmation
On Monday, Vitalik Buterin shared a comprehensive blog post exploring potential solutions to centralization threats within Ethereum’s block construction mechanism.
Block construction refers to the process of organizing transactions before they achieve finality on the blockchain. According to Buterin, this mechanism has emerged as a critical vulnerability for Ethereum’s decentralization.
The primary worry centers on how a limited group of advanced operators frequently controls block construction. These entities can strategically arrange transactions to maximize extractable value, creating competitive advantages over smaller network participants.
Ethereum’s forthcoming Glamsterdam upgrade, anticipated during the first half of 2026, will deploy enshrined Proposer-Builder Separation (ePBS). This protocol divides block proposers from builders by delegating construction responsibilities to a competitive marketplace.
While Buterin endorses ePBS, he emphasizes it represents an incomplete solution. Despite creating an open market structure, concentrated power among a handful of builders could enable transaction censorship or disproportionate profit extraction from network users.
Addressing these concerns, the Glamsterdam upgrade will incorporate FOCIL — Forward Obligatory Commitment to Inclusion Lists. This mechanism designates 16 randomly chosen participants who each specify transactions that must appear in subsequent blocks.
Blocks lacking these mandated transactions face rejection. According to Buterin, this ensures that even complete control over block construction by a malicious entity cannot enable transaction censorship.
Buterin advances the concept further with “Big FOCIL,” an amplified implementation managing all block transactions. This approach would restrict builders primarily to MEV-related transactions and state computations, essentially commodifying the block construction process.
Buterin also examined “toxic MEV,” where traders leverage visibility into unconfirmed transactions to execute frontrunning or sandwich attacks against other users.
His recommended solution involves mempool encryption, protecting the transaction queue awaiting confirmation. Encrypting transactions until block inclusion prevents advance exploitation.
Additionally, Buterin identified vulnerabilities at the network infrastructure level. Intermediaries can monitor transactions before they reach block builders.
He referenced privacy-preserving tools including Tor and Ethereum-specific mixnets like Flashnet as viable protective measures. He also mentioned the Ethereum Foundation’s Kohaku privacy initiative as relevant ongoing work.
Buterin’s analysis forms part of an extended series of technical assessments published throughout recent days. Previous installments have examined quantum resistance strategies and execution layer modifications.
